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Republic of the Philippines iJ

Supreme @outt
Ivlanila

Third Division

Sirs/lr4esdames

'fhird Division of
Quoted hereunder, for your information, is a resolution of the
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iltis Cotu1 dated September 26,2OO5;

rG.R. Nos. 169031-32 Arlene Bedayo, et al. vs. Sps. Gil
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Vicente and Cecilia Vicente and Court of Appeals

This petition seeks the reversal of the following issuances of

the Court of Appeals in its two (2) consolidated petitions for certiorari
- CA-G.R. SP No. 87'159 and CA-G.R. SP No. 87406 - to wit:

1. Dccisiorr 1 dated January 18, 2005, wt,ich granted the consoli<lated

petitiorrs and nullified and set asjde the iollowing Orders clated, (1) 20
April 2004; (2) 28 June 2004; (3) 17 Septernber 200,1; (4) 30 September
200a; (5) 5 October 200a; (6) l9 October 200a; Q) 2 November 2004; and
(8) 5 Novernber 2004, issued by the Regional Trial Court at Mantla,
l Branch 32, and directed petitionets Arlerie Bedayo, et al. to retunr the
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anrotrnt of P6,241,178.83 and Dollar Check No. l21C for $81,526.01 and
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all other barrk deposits to lhe custodia legls of the Regional Trial Coud at
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Makati City, Branch 56, and

2 Resolution datcd July 77,20A5, denying petitioners' ornnibus tnotion lor

reconsideration r.vitli Motion for lnhibition and oldering petitioners to
retun) the arnount of P6,241,178.83; and the Regional Trial Court at
Marila, Branch 32, to cause the retum of Dollar Check No. 1270 and all l
otlrer bank cleposits, to lbe arstodia /egis o f the Arrli-Mone1, Laundering
Corrucil. 't,
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The controversy stemmed from the iqfamous "tVlultitel pyramid
scandal" where Rosario Baladjay and other officers of tr4ultitel
lnternational Floldings, lnc., and its network of companies,
supposedly laundered and siphoned millions of pesos invested by the
unsuspecting public into lVultitel's bank accounts.

Pe*ed !y Associnte Justice Japar B. Dimaampao with Associate Justices Re'ato C. Dacudao a.cl
Edgardo I'. Sundiam, concurriug; Rollo, pp. 67-78.

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RESOLUTION 2' G.R. No. 165728

161
Saturnino Baladjay and his wife Rosario Balacljay as officers of
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lvultitel lnternational Holdings, lnc., held out to the public that lr4ultitel
lnternational Holdings, lnc., and other related companies were
engaged in the telecommunications and hotel & resort businesses;
that ltlultitel was authorized to solicit, offer and sell investments to the
public; and that such investments were guaranteed to earn enormous
interests. The parties herein (petitioners and respondents) are among
those who relied on such representations. Respondent-spouses Gil
Vicente and Cecilia Vicente (spouses Vicente) invested a total ,

amount of F42,465,000.00 in It4ultitel, while petitioners Arlene l

Bedayo, ef a/. likewise invested considerable amount of money in it.

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ln sho11, they are all victims of tt4ultitel's grand scheme.

When the Securities and Exchange Commission ascertained

that lVultitel was unlawfully soliciting and accepting investments from
the public, 'a Cease and Desist Order, ,made permanent on 24
January 2004, was issued against IVultitel enjoining it from continuing
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its business ventures. Subsequently, the Baladjay couple channeled
into their personal bank accounts, and that of their dummy
companies, the illegal gains and profits spawned from fraudulent
dealings of tVultitel. I

To recoup their losses, respondent spouscs Vicente filed a

Complaint for Sum of lvloney, Declaration of Nullity of Sale and
Cancellation of Titles with application for the issuance of a Writ of
Attachment against the Baladjay couple and I\4ultitel before the
Regional Trial Court at tt/lakati City. This was docketed as Civil Case
No 03-186, raffled to Branch 56 of the court.

Petitioners, on the other hand, filed with the same court

separate actions for Recovery of Sums of lv|oney, Damages,
Cancellation of Titles with prayer for lssuance of a writ of Preliminary
Attachment against the same defendants. These were docketed as
Civil Cases No. 03-002 and 03:122, both of wirich were raffled io
same Branch 56 of the lvlakati court.
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RESOLUlION 3 G.R. No. 165728

162
IVeanwhile, theAnti-lVloney Laundering Council (AIVLC),
through the Office of the Solicitor General, initiated twenty-one (2.1
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complaints For civil Forfeiture of Assels against lvlultitel and the
Baladjay couple, among others, before the Regional Trial Court at
N4anila. Among such complaints is Civil Case No. 03-107306, raffled
to Branch 32 of the l\4anila RTC. The AN4LC's Complaints averred,
among others, that the AIVILC issued Resolutions No. 141 and'1 45
dated 9 and 15 October 2002, respectively, fincling probable cause to
issue freeze orders against the bank accounts of R.A.B. Realty, lnc.,
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Multinational Telecom lnvestors Corporation, I\4ultinational
Telecommunication lnvestment Corporation (all corporate outlets of
the Baladjay couple) and Rosario Baladjay and Saturnino Baladjay.
Allegedly, these bank accounts and deposits were proceeds of
suspicious transactions, forfeitable under RA 91602, and of fraudulent -
dealings in violation of RA 87993. ln further support of its Complar)rfs,
AIt/LC cited this Court's alleged April 21, 2003 Resolution directing
the Baladjay couple, tVultitel, and other related companies, the i
concerned banks, and all persons acting in their behalves to give full
force to all existing freeze orders of ATVLC until further orders from
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this Court.
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On February 24,2OO3, the lt/akati RTC, Branch 56, issued in

Civil CasetNo. 03-186 a writ of attachment directing its sheriff to
seize all the properties of the Baladjay couple and Multitel to secure
the judgment that may subsequently be rendered in favor of the
spouses Vicente, as plaintiffs in that case. Finally, on April 23.2004,
said court rendered a Partial Decision in Civil Case No.03-186,
ordering the Baladjay couple and tVultitel to pay jointly and severally
the spouses Vicente the amount of P42,465,000.00 with interest, plus
attorney's fees and costs of suit.

AN ACT DEFINING THE CRIME OF MONEY LAUNDEzuNG, PROVIDING PENALTII]S

THEREFOR AND FOR OTHER PUIiIOSES.
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THE SECUzuTIES REGUL ATTON CODE,
 IiESOLUTION 4 V G.R. No. 165728

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lVeanwhile, as regards petitioners' complaints in Civil Cases
No. 03-002 and 03-122, the tVlakati RTC (also Branch 56) rendered a
Partial Joint Decision adated August 28, ,2003 in favor of petitioners
ordering I\4ultitel and the Baladjay couple to pay the amounts claimed
therein.

Controversy sprung when petitioners Arlene Bedayo, et al.

filed a Peillion and L|otion for the Re/ease of Funds of Baladjay and
l,rluttiteP at the IVanila RTC, Branch 32, whereat AIVLC's Civil Case
No. 03-107306 was pending. Said court granted petitioners' mol.ion in
its first challenged Order6dated April 20, 2004, directing the release
and segregation of lVlultitel's bank accounts deposited with Chinatrust
Phils. Commercial Banking Corporation (Chinatrust).

Then, in an Order dated June 28, 2004, the t\4anila RTC,

Branch 32, directed Chinatrust to release P55,401 ,610.62 to
petitioners pursuant to its Order of April 20, 2004. ln compliance
therewith, Chinatrust issued lVlanager's Checks No. 0000002710 &
0000002709 in the aggregate amount of P6,241,'l 78.83, and
delivered the same to the'Nlakati RTC; Branch 56 which deposited
said checks with the Landbank of the Philippines. ln view thereof,
I\4anila RTC, Branch 32, on motion of petitioners, dlrected the Clerk
of Court of the t\4akati RTC to release those checks so that the same
may be deposited with the Office of the Clerk of Court of RTC,
Iv4anila, and subsequently paid off to petitioners.

The AN4LC moved for a reconsideration of the April 20, 2004

Order of RTC, lVlanila, Branch 32, but its motion was denied by that
court in its subsequent OrderT dated Septe mber 17, 20O4.

On separate petitions for certiorari, respondent spouses -

Vicente and the AI\4LC elevated the matter to the Court of Appeals
imputing grave abuse of discretion against Judge Juarr C. Nabong,

Rollo, pp.?9-95.
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Rollo, pp 104- 106.
Rollo, pp. 108-112
p^lt^ n- 11d-t I5
. RESOLUTION G.R. No. 165728
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Jr., Presiding Judge, RTC [/lanila, Branch 32, in issuing the following
orders in its civil case No. 03-107306 and praying for the annulment
thereof , to wit:

(1) Order dated 20 April 2004; releasing and segregating the disputed
bank accounts, albeit subject.of the AMLC fi.eeze or<lers anrl the
rvrit of prelirainary attachrnent previously issued by RTC Makati
in favor of Bedayo, et al.;

(2) Order dated. 28 June 2004, ordering Cjrinatrust to release

P55,401,610.62, in favor of Bedayo, et Lrl., pursuant to the
aforementioned order dated 20 Aprit 2004;

(3) Order drted 17 September 2004, denying AMLC,s Motion for

Reconsideration and affirming the Order of 20 April 2004;

(4) Order datecl 30 September 2004, directing the Branch Clerk of

Court, Makati RTC, Branch 56, to release the subject bank
deposits, and for the Deputy Sl.reriff of ManilL R1'C, Branch 32, to
deposit said account with the Office of the Clcrk of Court, Manila:

(s) Order d.a,terl 5 October 2004, directing the release of Manager's

Check Nos. 0000002710 & 00OOOO27 09 issued by Chinatrust in
tlre amount of P6,241,178.83 in favor of Bedayo, et al.; and,

(6) Order d.alerl 19 October 2004,r directing the relcase of the

peso/dollar deposit maintained under the following accounts:
Accoulrt No. 12060000783, Chinatrust, Makati Branch; Account
No. 1-216-31148-5 & 8-21500039-8, Rizal Comrnercial Banking
Corp., Makati Branch, Account No. 0073135079, Bank of the
Philippine Islands, Makati Branch; CA No. 3601-01 1695, US
sA3602-005s585, SA3590-001485, SA.3592-000035, CA3681-
012247, 1'D3688k-000211, Allied Bar*, Makati Branch; and,
lurther ordering the President or any responsible officer of these
banks to facilitate the release thereof in favor of Bedayo, et al.

The certiorari petition of. respondent spouses Vicente was

docketed as CA-G.R. SP No.87159, While that of AIvlLC, as CA-G.R.
SP No. 87406.

ln addition to the above enumerated orders, the AIvlLC, in its

petition in CA-G.R. SP No. 87406, also assailed the Order dated
November 2, 2004 of the t\4anila RTC, Branch 32, which directed
Chinatrust to replace and/or convert the Baladjay couples' and
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tvlultitel's foreign currency checks into Philippine Currency based o7

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RESOLUTION 6 v G.R. No. 165728

the prevaili,ng exchange rate, and the Order November 5, 2004 ]G;
o1

the same courl which reiterated its November 2.2004 Ordei.

On November 17, 2004, the Court of Appeals issued a

temporary restraining order to preserve the slatus quo ol the
Controvelrsy, and consolidated CA-G.R. SP Nos. 87159 and 87406.

ln the herein challenged consolidated Decision dated

January 18, 2005, the appellate court nullified all eight (B) assalled
Orders of Manila RTC, Branch 32 and ordered petitioners to return
the amount of P6,241,L78.83, as well as Dollar Check No. 1270 for
$81,526.01, and all other bank deposits, to the custodla legis of the
Makati RTC, Branch 56. I

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The Court of Appeals explained that the Writ of Attachment i

dated February 24, 2003 and the Nollce of Garnisltmenf dated

Februar:y 26, 2003, both issued by the tt/lakati RTC in Civil Case No I
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03-186, thereby brought the Baladjay couple's and l\4ultitel's

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'deposits-savings current and/or time and stockholdings" into the

custodia /egls of the court issuing the writ, that is, RTC [\4akati,
Branch 56, beyond the interference gf all other coordinate and co-
equal courts, such as RTC Manila, Branch 32. The appellate noted
that when Judge Nabong, Jr. issued his assailed Order of 20 April
2004, and all other subsequent Orders, more specifically the one
directing the release of the amounl of P6,241,178.83 to petitioners
Bedayo, ei a/., and Dollar Demand Draft No. 1270 for $81 ,526.01, the
Writ of Attachment had not yet been vacated or otherwise dissolved
by the lvlakati RTC, Branch 56.

The Court of Appeals pointed out that the doctrine of judicial

stability or non-interference in the regular orders or judgments of a
co-equalr coud seryes as an insurmountable barrier to the
competence of N4anila RTC, Branch 32, to entertain 'petitioners'
Petition and ltrlotion to Reiease the Funds of Batadjay ancl lrrlultitel,

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ITESOLUTION G.R. No. 165728
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much less issue the Order of 20 April 2004, relative to the subject l
bank deposits which were under the.cusfodia /egis of RTC N4akati,
Branch 56, by virtue of its prior writ of attachment. The appellate court
stressed that a judge who presides in a branch of a court cannot
nrodify or annul the orders issued by another branch of a co-equal
court, because the two (2) courts are of the same rank, and act
independently but coordinately.

Additionally, the Court of Appeals anchored its Decision in this i

Courl's ruling in Repubtic of the Phitippines vs. Saludaresu that )'l

sequestration, freezing and provisional takeover are akin to the

provisional remedy of preliminary attachment or receivership, and
accordingly declared that the Att/LC's freeze order, pursuant to its
power to investigate money laundering activities based on a probable J
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cause that the money and properly of the Baladjay couple and I
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I\4ultitel are proceeds of unlaMul activities, operates as a writ. of )
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attachment that cannot be interfered with unless dissolved by the
proper court.
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ln their motion for reconsideration of the CA Decision, I

petitioners presented for the first time a Notice of Garnishment and

Officers Return to prove that IVultitel's property have been attached in
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their favor even prior to the February 24,2003 Writ of Attachntent and'
February 26,2003 Notice of Garnishment issued by the tt/akati RTC,
Branch 56, in favor of respondent spouses Vicente.

For its part, AIVLC moved for a partial reconsideration praying

that RTC, N,4anila, be ordered to return Dollar Demand Draft No. 1270
and all other bank deposits to their proper depository banks under the
custodia /egis of the AMLC, and not to the RTC, lVakati.

ln a Resolution of July 21, 2005, the Court of Appeals granted

AIi/LC's motion for reconsideration but denied that of petitioners for
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327 SCRA 449 [2000]

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 'RESOLUTION \../ ,8 v G.R. No. 165728

their belated presentation of the document mentioned in their motion.

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Dispositively, the Resolution reads:

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WHEREFORE, the Court resolves as follo\vs:

1
The Anti-Money Laundering Council's il[otion for Partial
Rec o ns ide ra t io n is GRANTED;

2 Private respondents Arlene Bedayo; et al. are DII{IICTED to

return the amount ofP6,241,178.83, and the Regional Trial Court
of Manila, Branch 32 to cause the return of Dollar Check No. 1270
artounting to $81,526.01, and al1 other bank deposits, to the
custodia /egrs of the Anti-Money Laundering Council; and,
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Private rdspondents Arlene Bedayo, et al-'s ()ntibus Motion for

Reconsideration ,vith Motionlor lihibition is DENIED.

SO OIU)ERED.9

The instant recourse must likewise fail.

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i To begin with, RTC, lv1anila, Branch 32, in its assailed April 20,
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2004 Order, granted petitioners' Petition and f\4otion for the Re/ease -
of Funds by treating the same as a "third-party claim that should be
categorized under Rule 60 of the Revisecl Rules of Court on
Replevin,"10 specifically Section 71' thereof.

Rollo, p. 64.
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Ilollo, p. t 10.
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Sec.'l Proceedings vhere prcpertj claitned by third persott - lf the property taken is clairued by
any person other tha[ the party against rvhorn the writ of replcvin had been issued or ltis agent,
ard such person makes an affidavit of his title thereto, or right to the possession thereof, stating
tlre grognds therefore, and saves such affidavit upon the sheriff u'hile the latter has possessiou of
the property and a copy thereof uporr the applicant, the sheriff shall not be bouud to keep lhe
property under replevin or deliver it to the applicant unless the applicant or his agent, on demand
of said sheriff, shall file a bond approved by the court to indenurify the third-party clairnant in a
sum not less than the value of the property under replevin as provided in section 2 hereof. ln case
of disagreement as to such value, the court shall detemrile the same. No claim for damages for the
taking or keeping of the property may be enforced against the bond urless the action therefor is
filed rvithin one hundred twenty (120) days from the date of the filing of the bond.

, The sheriff shall not be liable for damages, for the taking or keeping of such property, to
any such third-pa.ty claimant is such bond shall be frled. Nothing herein contained shall prevent
such claimant or any third person from vindicating his claim to the property, or prevent the
applicant from claiming darnages against a thiid-party claimant rvho filed a frivolous or plainly
spurious claim, in the same or a separate action.

When the writ of replevin is issued iu favor of the Republic of the Philippines, or any
officer duly represerting it, the filing of such bond shall not be required, and in case thc sherifl is
sued for damages as a resuit of the replevin, he shall be represented by the Solicitor Ceneral, and if
held liable therefor, the actual damages adjudged by the court shall be paid by the National
Treasurer out of the [u[ds to be appropriated for the purpose.

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RF,SOI,I]TION 9 G.R. No. 1651,28
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The rules on replevin, however, require the posting of a bond to l
answer for whatever damage that may be incurred by the adverse
party in the event the order of release or delivery is adjudged
erroneous. lssuing an order of replevin despite absence of a bond is
perilous as it might render nugatory the judgmentf in the civil
. forfeiture pioceeding. ;

On a more crucial point, Civil Case No.03-'1 07306 of RTC,

N4anila, Branch 32, from whence the assailed orders sprung, is an
action for "Forfeiture of Asset" filed by tlre Republic of the
Philippines, through the Anti-lVoney ,Laundering Council. The
complaint was anchored on the civil forfeiture provision of R'ppublic
Act 9160, as amended, which makes no categorical, much'!less a
fleeting reference to the rules on replevin. On this score alone, the
Orders assailed in the consolidated petitions for certiorari in CA-
G.R. SP. Nos. 87159 and 87406 must be struck down.
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Section 12 (b) of RA 9160 provides the proper procedure fbi,

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claims on forfeited assets:

"Sec. 12. Forfeiture Provisions. -

(b) Clainr on Forfeited Assets. - \Yhere the
court has issued au ordcr o[ forfeiture of llte tnonetarl'
instrurnent or pl'operty in a critninal prosecr"rtion lor atiy
nor.rey lar.urdering offense defiued uncler Section 4 of thts
Act, the offer-rder or any other'person claitning zrlr
interest therein rnay appll', b1, verified pctition, for a
declaration that the sanre legitimately belougs to him
and for segregation or exclusion o[ tlte Inortetary
instrurnent or propcrtl, cor,respondiug thereto. The
verified petition shall be filed with the court rvhich
r endered the judgrnent of couvictiou and order of forfeiture,
rvitl.rin fifteen (15) days frour the date oi the order of
forfeiture, in default of rvl.riclt the said order shall become
final and executory. This provision shall lpply in botlt
civil and crinrin al foifeiture."

The aforequoted provision reciles in detail what must be

followed by any person who may have a legitimate claim over
monetary instrunrent or prope(y forfeited. The procedure applies to

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RESOLU'|ION V l0 G.R. No. 165728

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criminal, as well as -civil forfeiture. As it is, petitioners did not even
attempt to comply with Sec. 12 (b), supra, of RA 9160. Worse, arrd
as borne by the records, there is not even an order of forfeiture yet,
which is a condition sine qua non before a petition for segregation of
funds may be filed. To say the least, it is
this Court's beVondi I

comprehension why the tVlanila RTC failed to appreciate the clear

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and unmistakable mandate of Sec. 12 (b) of RA 9160. ln fine, the

appellate court correctly nullified the Order dated 20 April 2004 and
all other subsequent challenged Orders issued by the [\4anila RTC,
Branch 32, in its Civil Case No. 03-107306.

WHEREFORE, the instant petition is DENIED ;a{d the

challenged Decision and Resolution of the Courl of fippeats
AFFIRMED.

SO ORDERED.

Very truly 1,ours,

,rf
(IflL-0 lu-d*,,^
LIJCII A ABJIiLI NA-SOITIANO
Clerk of Court

4\

Attv. Nelson Clemente

Counse I for Peti tioners
No. 10 Nery St,. cor. Rosarv St.
Remrnanville Exec. ViI1.
Pa ra n-aq ue Ci ty
The Judgment Di"'ision
The Court of AppeaI's
CA-G.R. SP No. 8715? & 87406 Suprcme Court, Nlalrila
1000 an i 1a
Atty. Leila Cruzat
Coun 5el for Re5pondents
lJnit 68. Vernida I Condo..
1?0 Amorsolo St.. Leqaspi Villaqe
I'lakati CIty
The Solicitor General
l3q Amorsolo Street, Legaspi Viltage
1229 ltla ka t i City

The Anti-l'lonEy Launderinq Counc.il

5/F EDPC Buildinq i BSP Complex
Roxas Boulevard, 1000 I'laniIa

1690J1-32